Profits of nickel imports near cost levels

SHANGHAI, Jul 19 (SMM) – Profits of nickel imports grew close to cost levels as of Thursday July 19, with transactions of Norilsk materials (warehouse warrants) at premiums of $180/mt heard in Shanghai bonded areas, SMM data showed.

The import arbitrage window has remained opened of late as LME nickel continued to fall. LME nickel sank to a low in nearly three months while SHFE nickel saw a smaller decline.

Trading in the bonded areas this week was more brisk than last week. We expect the import arbitrage window to expand.

Spot premiums of imported nickel in the bonded areas have mostly been heard at $100-200/mt since 2010. Trades in the open import arbitrage window were active, with premiums of $200/mt. Trades were poorer when the window was closed, with premiums below $150/mt.

Before 2014, imported materials only incurred losses. Losses grew to 20,000 yuan/mt at one point.